The ultimate aim of the codes is to implement voluntary measures that complement the provisions of the National Credit Act in respect of the statutory Debt Review Process. This is to ensure that the maximum number of debt review cases is processed.

The NCR’s codes of conduct seek to streamline the debt counseling process by standardizing the content debt proposals and payment plans. They also set out to establish an Ombud scheme to resolve disputes and provide clear guidelines for debt counselors to determine whether consumers are able to afford more debt.

Credit providers who abide by the codes commit to addressing operational issues that have in the past hampered debt counseling.

Since 2007, over 200 000 consumers have applied for debt review with an estimated 110 000 cases under active review. Approximately an average 7 000 consumers apply for debt counseling each month. There is an estimated 20 000 debt counseling cases that have been resolved through the country’s courts, with 26 000 still on the roll.

Davel said the success of the proposed interventions depend on the extent to which debt counseling software vendors can enhance and update their software. To support this, NCR has embarked on a process to accredit debt counseling systems.

Draft Accreditation Standards for system vendors have been developed and these are expected to be finalised before the end of 2010, with the first accreditation audits of these systems taking place in January 2011.

One of the recommendations made by a task team established in October 2009 was the establishment of a Debt Review Advisory Committee (DRAC). The committee has since been established and it comprises industry representatives.

The mandate of the committee is to develop, implement and monitor the effectiveness of the debt review process on an ongoing process. The committee also oversees the implementation of codes of conduct for credit providers, debt counsellors and payment distribution agencies in order to regulate their conduct,” said Davel.

The committee also aims to foster trust and cooperation between debt counsellors and credit providers to ensure the debt counselling process runs more smoothly.

The NCR said consumer complaints about debt counsellors or credit providers who do not abide by the codes can be referred for mediation to the Credit Ombud, who has received approval from the Financial Services Ombud Scheme Council to extend its jurisdiction to mediate on issues relating to debt review. - BuaNews

Pretoria - The National Credit Regulator NCR has released new codes of conduct for credit providers in an effort to help indebted South Africans and address bottlenecks in the debt review process Industry codes of conduct have now been finalised and we believe these will go a long way towards addressing backlogs and improving co-operation between players to finalise debt counselling matters “This will further assist consumers experiencing financial distress due to over-indebtedness,” said NCR CEO Gabriel Davel on Tuesday